(OTTAWA) Total residential mortgage debt in Canada was $2.08 trillion in January, up 6% from the same month last year, the Canada Mortgage and Housing Corporation (CMHC) said on Thursday.
However, the Federal Housing Agency said in its new report that the rate of growth in mortgage debt has slowed compared to recent years.
CMHC attributed the trend to inflation, soaring interest rates and a slowdown in housing markets, which weakened consumer confidence and reduced the number of potential buyers willing to transact.
Many people are choosing to reduce their monthly debt service costs and switch to shorter-term fixed-rate mortgages because they expect interest rates to eventually come down.
According to the CMHC report, five-year fixed-rate mortgages accounted for less than 15% of new mortgages in January, compared to 21% of new mortgages in January 2022 and 40% of new mortgages in the first month of 2021.
Adjustable rate mortgages fell to less than 20% of new mortgages earlier this year, compared to nearly 57% in January 2022 and nearly 25% in January 2021.
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